All Forum Posts by: Dan V.

@Melissa Stoltzfus Have you looked at Quickbooks bill pay? I believe they have both online (cost extra) and desktop version. I have not had a chance to try it but, it might be something you want to take a look at. Good luck and let me know what do you think about it. 

@Karen Kasjaniuk

Welcome to BP.

1. This totally depends on the user/owner. But I would recommend having it updated monthly so you can see your progress or if you are following any budget, you can adjust accordingly. 

2. Any cash you bring in to the company are either equity (your investment) or loan (if you are planning to repay). If you consider it a loan, you will need to pay interest on it at least at the minimum rate allowed by IRS.

3. Any personal withdrawal or equity distribution will be booked as "Owners distribution" (equity transaction).

4. The mortgage points will set on the balance sheet and amortize (amortization expense) it over the life of the loan.

All the best!

Welcome to BP @Kevin Franks . Same as you are, I'm new here and still in learning phase while saving money for my first investment. All the best!

@Kathleen J. If you have to bring evidence, as suggested by others, print/pull the activity on your QB merchant account around the date he claimed he paid, bank statements showing that the other deposits have cleared except his, and also take a screenshot of the online activity tab showing that he has not viewed or paid the invoice. You can bring another example of good invoice he paid showing how it supposed to look like if he actually viewed or paid the invoice electronically. Also, I would show the email along with the incorrect hyperlink (he messed up on that part) to show that he forged the receipt. If you setup QBO to attach the pdf copy of the invoice then that will explain how he got the December invoice number and used it to forge the receipt. 

Goodluck on your case!

@Rick Jones Loan costs are normally amortized over the term of the loan or expected life of the loan. Some people use 5 years as a standard expected life of the loan but that, of course, depends on your circumstances. Consult your accountant for further guidelines. 

@Mike R. I would rather book the transactions as follows (assuming you have not finalized your books yet):

To record payments made in 2017:

Due from Insurance Claim     $ 2,890 Debit

Repairs & maintenance          $   500  Debit

Cash                                                             $3390 Credit

To record cash from insurance

Cash                    $2890 Debit

Due from Insurance Claim   $2890 Credit

If you decide to keep the capitalization (if the repair has significantly increased the value or extends the life of the property), then you can recognize the cash as revenue from insurance claim.            

@Nicholas Aiola Are the tax rates different when you take a buy out (sell your interest in the partnership) or sell all the properties and dissolve the partnership? Assuming both will result in a gain. 

@Mason Carter First of all, congratulations on your first accepted offer! As most startup do (and even pro's), Excel is a good tool to start with, in keeping track of the transactions for your RE investing. Since you are already familiar with bookkeeping, you will need to expand your knowledge in the proper accounting for real estate (flips and rental have different accounting/tax treatments) and also make sure to keep track of the transactions by property. The good thing about using a software (like Quickbooks), you can automate certain things which will save you some work. 

Good luck and I wish you the best on your first deal. 

@Roy Gutierrez When you do your research, the right keyword to use is "capitalize repairs". Basically, routine maintenance can be deducted right away but major repairs that will improve the value or prolong the life of the property needs to be capitalized. 

Here is a good reference in determining what to capitalize (subject to depreciation) or expense (deduct right away). If you're really into reading,  here is the IRS rules for capitalization of tangible property.

Additionally, any minor repairs done on the property prior to becoming "rent ready", need to be capitalized, these are called start up expenses and has a different accounting treatment (amortized, not depreciated). 

In your case, either way, all work done prior to placing the property in service need to be capitalized. If the repairs done improved the value or prolonged the life of the property, it should be capitalized  as fixed asset and depreciated over period of time, if they're just minor repairs (which I don't think they were) then it should be capitalized as start up costs and amortize over period of time. 

Hope this somehow answers your question.

@Nicholas Aiola I don't have any questions but I am following this discussion to gain knowledge, especially on tax implications. Hats off to you for initiating the post and offering free advice to BP community. Keep it up!!!